Project detail - TOBENE POWER SA

TOBENE POWER SA

Who is our client

Tobene Power SA is an independent power producer (IPP) incorporated in Senegal that will develop, construct and operate a 96 MW heavy fuel oil (HFO) combined cycle power plant in Senegal, located 90km from Dakar in Taiba Ndiaye. The engines are capable of running on HFO and diesel, with the option of being converted to gas at a later stage, when gas becomes available, at additional cost. The plant will sell its energy to national utility SENELEC. There is a long-term power purchase agreement (PPA) in place for 70 MW out of the 96 MW. The plant has been designed larger than necessary, and can keep one engine spare as a buffer to absorb shocks from the unstable grid. This will also allow it to run less risk of facing non-availability penalties. Start of operations is expected after 22 months of construction, in February 2016. The sponsor, Matelec, is financially strong and experienced.

Funding objective

FMO is providing a EUR 25 mln loan, joining as a B-participant following IFC in a much-needed energy project in a low-income country (LIC). The size of the power plant is important to the energy sector of Senegal. SENELEC will have a local bank issue a standby letter of credit, which in turn will be backed by a Partial Risk Guarantee from the International Development Association of the World Bank Group. In addition, the obligations of SENELEC are backed by a government guarantee. On the environmental and social impacts side, the project adheres to the international IFC Performance Standards.

Why we fund this project

Regular power shortages have significantly impacted economic growth in Senegal and the cost and reliability of the electricity supply is the most significant risk to growth and stability. This 96 MW project is a significant addition to the current installed capacity of less than 700 MW, for a population of 14 million, and the project has positive impact on the availability and reliability of power in Senegal.